Differing takes on supermarket stance
Consumers were hammered with a doublewhammy of hits to the household budget this month with the news of increasing power costs and no foreseeable end to the dominance of the supermarket sector by two major chains.
On March 8we learnt that government adopted the measures put forward in a 2019 review of energy pricing that will see 60 per cent of us paying more for the power we use.
At the same time, the release of a Commerce Commission report dampened any attempt to deter grocery giants from ramping up weekly food costs already inflated by supply-chain disruption.
In a blow to low-income households, government will phase out low-usage pricing, double line charges for electricity and gas and remove prompt-payment discounts.
Consumer NZ says, with many power companies putting up their variable charges at the same time, more Kiwi families will be affected by energy hardship.
Currently, 18 per cent of us find it hard to meet the cost of power and that number, alongside penalty fees and disconnections, will inevitably rise with bills forecast to go up $650 per year by 2027. Meanwhile, in the face of pandemic-related inflation on food prices across the country, the Commerce Commission’s report failed to address Woolworths and Foodstuffs continued control over 80 percent of grocery sales.
The Commission indicated disapproval of the practice of land-banking by the retail chains but its report made no provisions for the introduction of price competition into the $22 billion domestic market.
All Kiwis have a right to expect government to be upfront when it comes to decisions that impact the basic cost of living.
There can be no room for double-speak on bread and butter issues but at the moment that’s all we seem to be getting.
We heard it in the announcement of changes to power charges.
Energy Minister Meghan
Woods says the new pricing will be fairer for all Kiwis while nonprofits like Powerswitch and Sustainability Trust tell us the benefit will go to line companies, retailers and high-user households and not to the average consumer.
The same contradictions plague the duopoly debate.
Food and Grocery Council head Katherine Rich says the grocery sector needs to include five supermarket chains to guarantee price competition for shoppers.
On the other hand, Commerce and Consumer Affairs Minister David Clark says working within the two-player structure ensures ‘‘hard-working Kiwis are getting a fair deal for the things they buy and consume’’.
In the face of these conflicting statements, it’s harder than ever to know how to respond or who to believe. What is clear is that being able to afford a healthy diet and awarm home is going to become an increasing challenge for ordinary families, particularly those on low incomes.